Commentary and analysis to persuade people to become socialist and to act for themselves, organizing democratically and without leaders, to bring about a world of common ownership and free access. We are solely concerned with building a movement of socialists for socialism. We are not reformists with a programme of policies to patch up capitalism.

Monday, April 27, 2015

Pension Age Raised: Die before You Retire

The life expectancy of Zambians is between 48 and 56 years. So it
doesn't make sense to raise retirement age to 65. Importantly, a law
should be passed to enable retirees to get their pensions fast and
easily.

In November 2014, Acting President Guy L. Scott signed Statutory
Instrument No. 63 of 2014 that raised the retirement age from 55 to
65 years, or 35 years of service.In December 2014, the
Minister of Labor and Social Security is quoted by Doreen Nawa of the
Zambia Daily Mail as having defended the change in the country’s
retirement age as follows:

“We adjusted the retirement age
as a way of increasing people’s life span. Information has shown
that most people that have retired at 55 have died earlier because of
many factors.”

The Minister is also quoted as having said
that retirement age in the southern African region and beyond is 60
years.

In March 2015, President Edgar C. Lungu directed that
changes be effected through an amendment to Statutory Instrument
No.63 of 2014 signed by Acting President Scott to introduce a
graduated arrangement designed to provide for the following three
retirement options:

These changes to the retirement age are unacceptable
for a number of reasons. Firstly, the changes needed to be made in
sincere consultations with relevant non-governmental
stakeholders—including the Zambia Federation of Employers and the
Zambia Congress of Trade Unions and its affiliate labor unions—rather
than by presidential decree.Secondly, it is unrealistic to
have retirement options that are above our people’s life expectancy
that is currently between 48 and 56 years, depending on one’s
source of information, which places the country in the 160th position
out of 182 countries surveyed by CountryEconomy.Com.

According
to the findings of an international health study published online in
the Lancet (a medical journal) in May 2010, Zambia had the worst
female death rate and the second-worst male death rate in the
world.So, there is no wisdom in mimicking countries whose
citizens have higher life spans in setting the retirement age for
employees in our country!Therefore, realistic retirement
options for Zambian employees should have been the following:

(a)
45 years old, or 25 years of service – early retirement;(b) 50
years old, or 30 years of service – normal retirement; and(c)
55 years old, or 35 years of service – late retirement.

There
is also a need for Parliament to enact legislation designed to make
retirement benefits payable within 60 or so days (Saturdays, Sundays,
and public holidays inclusive) from a retiree’s last date of work.
Benefits (or any portion thereof) not paid within this period should
fetch 5% interest per month.Delayed payment of retirement
benefits has made some retired citizens to re-enter the job market as
part-time workers to earn a living while they await the disbursement
of their benefits, while others have died before they are paid their
benefits.The high levels of unemployment in the country
militate against the increase in the retirement age. There is no
doubt that the higher retirement age is going to lead to
unprecedented numbers of young job seekers roaming the streets due to
inadequate job openings mainly resulting from older citizens’
delayed retirement.